The Internet of Things Is Here, and It Isn’t a Thing

By Aarthi Rayapura • August 22, 2016

By Christopher Mims in The Wall Street Journal
Everyone is waiting for the Internet of Things. The funny thing is, it is already here. Contrary to expectation, though, it isn’t just a bunch of devices that have a chip and an internet connection.

The killer app of the Internet of Things isn’t a thing at all—it is services. And they are being delivered by an unlikely cast of characters: Uber Technologies Inc., SolarCity Corp., ADT Corp., and Comcast Corp., to name a few. One recent entrant: the Brita unit of Clorox Corp., which just introduced a Wi-Fi-enabled “smart” pitcher that can re-order its own water filters.

Uber and SolarCity are interesting examples. Both rely on making their assets smart and connected. In Uber’s case, that is a smartphone in the hands of a driver for hire. For SolarCity, the company’s original business model was selling electricity directly to homeowners rather than solar panels, which requires knowing how much electricity a home’s solar panels are producing.

Here is another example: On June 23, Comcast said it would acquire a unit of Icontrol Networks Inc., which helps set up smart homes for clients. The company, founded in 2004, prides itself on being “do it for you” instead of “do it yourself,” as are most home-automation systems, says Chief Marketing Officer Letha McLaren.

Understanding that most people want to solve problems without worrying about the underlying technology was crucial, she says. “Early on, we found that if you called what we do ‘home automation,’ people liked it but they would not spend money on it,” Ms. McLaren says. “But if you called it ‘peace of mind’ and anchored it on home security, then people knew they need to have that and would spend $35 to $45 a month on it.”

Contrast that with Alphabet Inc.’s Nest unit, which sells a smart thermostat and smoke alarm, both of which operate primarily as isolated devices, rather than as components of a larger service. Alphabet didn’t respond to request for comment.

When internet-connected devices are considered a service, consumers don’t have to worry about integrating gadgets. Focusing on services also helps vendors clarify their offerings.